The Electronic Transactions Association is redoubling its efforts to shape legislation and regulation in ways that benefit the acquiring industry.
The trade groups CEO, Jason Oxman, recently announced the formation of ETA PAC, a political action committee thats seeking donations from ETA members.
The PAC plans to contribute some of the funds it raises to the campaigns of candidates who support the industry, Oxman said during the associations Strategic Leadership Forum in Scottsdale, Ariz.
The PACs apparently without precedent, according to Mary Bennett, who serves as ETAs director of government and industry relations and has been with the association for more than five years.
We believe its the first PAC for the merchant-acquiring side of the business, she says. Banks on the issuing side have had PACs for years.
Two months ago, the association hired Jaime Graham as senior manager of government relations to build and administer the PAC ,Bennett says. Graham was formerly legislative director for a member of the House Appropriations Committee.
The PAC is pursuing its first issue, a campaign to convince Congress to establish national data breach reporting standards to replace the welter of state and local reporting requirements that ISOs and merchants now face when a breach occurs.
Legislation addressing the situation is pending in the House and the Senate, she says.
The Data Security and Breach Notification Act of 2013, S.1193, is sponsored by Sen. Pat Toomey, R-Pa., and six other senators and is focused on breach reporting.
In the House, Rep. Marsha Blackburn, R-Tenn., is sponsoring H.R. 1468 to establish national breach reporting.
The ETA told association members in an action alert that the bills need additional sponsors and suggested contacting members of both houses to elicit support for the proposed legislation.
In the meantime, 46 states have differing reporting laws, and the other four states provide no guidance, Bennett says. The laws, statutes, rules and regulations change frequently and require constant monitoring, she notes.
It would make the world a better place if we had clarity and no confusion, Bennett maintains. It would be good for consumers because there would be the same process every time. Everyone would provide the same information when there is a breach.
If breaches arent fully reported, every business in the acquiring chain, including ISOs, processors, gateways, service providers and acquiring banks, can feel the effects, Bennett points out, adding that lawsuits and penalties can result.
Sitting on [a breach] could put a business into a death spiral Bennett warns.
Seeking a national approach to remedying that situation is part of what the association calls its Voice of Payments advocacy program.
Even before announcing the PAC and its first campaign, the ETA was working on issues that affect the industry, Bennett notes.
In May, the association sent a letter to the Internal Revenue Service, outlining problems processors and ISOs face complying with a rule that they report merchants card transactions to help the IRS catch tax scofflaws. An ETA working group has been studying the situation this summer.
Reporting the transactions requires that the business names and tax identification numbers, of TINs, that the processers have on file match exactly with IRS records.
If a processor or ISO submits records for a dry cleaner called Jose and Sons, while the IRS files show a Jose & Sons, the reporting doesnt occur.
Its difficult for processors to obtain the correct names and TIN because merchants usually dont know anything about their processors and are thus reluctant to surrender information to them.
That often relegates ISOs, the companies that cultivate merchant relationships, to the time-consuming task of explaining the reporting to their merchant clients.
To make matters worse, the IRA uses systems some consider slow and antiquated to match the information received from acquirers with the data they have on file.
In view of those problems, the IRS granted a one-year extension to the deadline to start reporting transactions, Bennett said.
Its a huge relief to us and to merchants, she said of the extension.
Meanwhile, in another part of the push for more beneficial government action, Bennett has become a registered lobbyist. Registration is required for anyone spending 20% or more of his or her time lobbying Congress.
We are stepping up the amount of activity we are doing in Washington, Bennett says. I am free to go and do more advocacy work.